Blockchain in Japan runs under one of the oldest crypto licensing systems in the world, set up after two large exchange failures in Tokyo. This guide covers the regulators, the licenses, the main hubs and public projects, and the questions to ask before you work with a Japanese blockchain firm.
How Japan's crypto rules developed
Mt. Gox was the largest bitcoin exchange in the world before it collapsed in Tokyo in 2014. Japan then amended its Payment Services Act, so from April 2017 an exchange that served Japanese residents had to register with the Financial Services Agency (FSA).
In January 2018, hackers stole tokens from the hot wallet of the Coincheck exchange. The FSA inspected many exchanges after that theft and issued business improvement orders. Later amendments renamed "virtual currency" to "crypto assets" and required exchanges to keep customer assets separate from company assets and to hold most customer assets in cold storage.
In May 2024, attackers took 4,502.9 BTC from the exchange DMM Bitcoin. In December 2024, the FBI and Japan's National Police Agency linked the theft to TraderTraitor, a group tied to North Korea. DMM Bitcoin closed and moved its customer accounts to SBI VC Trade in March 2025. Because of these three events, Japanese regulators examine key management and wallet design in detail.
Regulators and licenses
| Body or license | What it covers |
|---|---|
| Financial Services Agency (FSA) | Registers and supervises exchanges, stablecoin issuers and securities firms. Publishes the list of registered firms. |
| Crypto asset exchange service provider | Registration for any firm that trades, brokers or holds crypto for Japanese residents. |
| JVCEA | The self-regulatory body for crypto exchanges. It reviews tokens before listing and sets rules on advertising and operations. |
| JSTA | The Japan Security Token Association, an industry body for firms that issue and sell security tokens. |
| Electronic payment instrument issuer | Only banks, trust companies and registered fund transfer service providers may issue fiat-backed stablecoins. |
Exchange registration
A crypto asset exchange service provider must meet capital rules, keep customer assets separate, run anti-money-laundering checks, follow the Travel Rule and manage system risk. An overseas platform may not serve Japanese residents without registering, and the FSA has published warnings against several foreign exchanges for doing so.
Token listing review by the JVCEA
The Japan Virtual and Crypto assets Exchange Association (JVCEA) is certified by the FSA. Every registered exchange is a member. Before an exchange lists a new token, the JVCEA reviews it. For years the review made Japanese listings slow, and the JVCEA later added a faster path for tokens that other members already list.
Stablecoins
Amendments that took effect in June 2023 define fiat-backed stablecoins as "electronic payment instruments". A June 2025 amendment let trust-type issuers hold up to half of their reserves in low-risk assets such as short-term government bonds and created a new intermediary category for firms that distribute stablecoins and crypto assets. JPYC Inc. registered as a fund transfer service provider in August 2025 and in October 2025 began to issue JPYC, the first regulated yen stablecoin, on Ethereum, Avalanche and Polygon. Algorithmic stablecoins do not count as electronic payment instruments.
Security tokens and DAOs
Japanese law treats a security token as an "electronically recorded transferable right". Securities firms distribute most security tokens in Japan, and most of them represent real estate or bonds. The Osaka Digital Exchange opened START, Japan's first trading market for security tokens, on 25 December 2023. A Cabinet Office order took effect on 22 April 2024 that changed how securities law treats token membership interests in a godo kaisha (a Japanese LLC). Some projects now use a godo kaisha as a legal form for a DAO.
The 2026 move to securities law
In July 2026, the Diet passed amendments that move crypto assets from the Payment Services Act to the Financial Instruments and Exchange Act. The new law adds insider trading rules for crypto assets and more disclosure for issuers and exchanges. It also raises the maximum penalty for an unregistered operator from three to ten years in prison. The FSA phases in the detailed rules on dates that it sets.
Tax
Japan taxes an individual's crypto gains as miscellaneous income. Combined national and local rates on that income reach about 55%. The government plans a separate tax of about 20% on crypto gains, with a three-year loss carry-forward. That change needs its own tax law, and reports point to a start in 2028. Corporate rules changed in 2023 and 2024, so a company no longer pays tax on unrealized gains on some tokens it issued or holds long term.
Blockchain in Japan: hubs and public projects
Tokyo holds the FSA, the head offices of most registered exchanges and the large banks and game publishers. Osaka hosts the Osaka Digital Exchange. Fukuoka runs startup programs, and some Web3 firms base their teams there.
Japan's game, anime and manga firms own characters and stories with fans around the world. That intellectual property shapes the Japanese blockchain sector, and several public projects build on it:
- Soneium. Sony Block Solutions Labs, a joint venture of Sony Group and Startale Labs, launched this Ethereum layer 2, built on the OP Stack, on 14 January 2025.
- Astar Network. Astar was founded in Japan, has worked with Japanese companies and moved toward the OP Stack alongside Soneium.
- Oasys. Oasys is a blockchain designed for games and backed by Japanese and international game companies.
- JPYC. JPYC is the regulated yen stablecoin described in the stablecoin section.
- START. START is the security token market of the Osaka Digital Exchange, which SBI and large Japanese banks and brokers back.
For related builds, read blockchain game development and NFT marketplaces on Astar.
Blockchain companies in Japan: the main types
| Type | What they do | License needed |
|---|---|---|
| Registered exchanges | Trade and hold crypto for Japanese residents | FSA registration, JVCEA membership |
| Stablecoin issuers | Issue and redeem yen stablecoins | Bank, trust company or fund transfer license |
| Securities firms | Issue and sell security tokens | Securities registration |
| Chain and protocol teams | Build networks such as Soneium, Astar and Oasys | Depends on the services they offer |
| Development firms | Write software for other companies | Usually none for software alone |
Most engineers work in Tokyo, with smaller groups in Osaka and Fukuoka. Japan has many strong backend and game engineers, but fewer specialize in smart contracts or in security audits, and many of them work mainly in Japanese.
How to assess a blockchain firm in Japan
Japanese enterprise and regulated clients expect detailed specifications, full documentation in Japanese, and support for the system over many years. For a regulated product, those expectations call for a Japanese firm or a foreign firm with a Japanese project lead. A remote foreign team can write smart contracts for a product aimed at a global market.
- Check whether the firm has built systems for an FSA-registered exchange or custodian. Ask what the FSA examined when it inspected that client.
- Ask how the firm keeps customer assets separate and how it reports cold storage ratios.
- Ask whether the firm can write specifications, test reports and the user interface in Japanese.
- Ask about any work on a JVCEA listing review or on a security token issue through a securities firm.
- Ask how the firm will adapt the system to the 2026 securities law and its insider trading rules.
For exchange systems, read crypto exchange development. Tokenized property is the most common Japanese security token, and the guide to real estate tokenization covers it. To compare other markets, read the guides to Singapore and Australia.
Frequently asked questions
Can a foreign exchange serve users in Japan?
Not without FSA registration. The FSA has issued public warnings against several overseas exchanges that served Japanese residents without registering.
How long does a token listing in Japan take?
The time depends on the token and the exchange. A token that no Japanese exchange lists yet gets the full JVCEA review, which usually takes months.
Does Japan allow Web3 games?
Yes. The government supports Web3, and large publishers have tested blockchain games, but a game that pays out tokens must still follow Japan's gambling, prize and crypto asset rules.
Can a startup issue a yen stablecoin?
Only as a bank, a trust company or a registered fund transfer service provider. JPYC Inc. registered as a fund transfer service provider before it issued JPYC in 2025.
What changed for crypto in Japan in 2026?
The Diet moved crypto assets under the Financial Instruments and Exchange Act in July 2026. The change adds insider trading rules and raises penalties for unregistered firms. A lower tax rate on crypto gains needs a separate law.